A Figure to Die For

Community Health Systems cashed in big on the stomach stapling rage. It almost cost Kaye Parsley her life.

A common form of bariatric surgery is the Roux-en-Y gastric bypass, which separates the stomach into two parts. The upper half is restricted to form a pouch that can hold about one fluid ounce. The larger portion at the bottom is stapled shut. The small intestine is then cut and reconnected to the newly created pouch.

With a smaller stomach, bariatric patients don't eat as much as they did before. The procedure also has a built-in safety mechanism called the dumping syndrome, which makes patients sick if they eat fatty and sweet foods. And because food bypasses part of the small intestine, patients absorb fewer calories.

These three factors, along with continued psychological counseling and help from support groups, can help patients lose weight safely.

When Kaye had exhausted all other options, she contacted a bariatric referral service and got the names of two local doctors. After finding out her first choice had an extra-long waiting list, she called Srungaram. A nurse invited Kaye to the doctor's monthly seminar, held in a Cypress-Fairbanks Medical Center Hospital meeting room.

Along with about 100 others, Kaye attended the seminar and heard from Srungaram and some of his patients. During the Q&A session, Kaye, never one to hold her tongue, stood up and asked Srungaram point-blank if he had ever lost a patient.

Yes, he said, he had lost one. That was because the person opted for herbal medicine rather than the recommended regimen.

Fair enough, Kaye thought.

She and other audience members spent a few minutes with Srungaram before the seminar ended. She decided he was her man and scheduled an operation.


Born in 1985 to relatively humble Houston roots, Community Health Systems has become one of the largest hospital groups in the country. Now based in the Nashville suburb of Brentwood, CHS's holdings soared in the last six years.

The chain encountered controversy when a whistle-blower at one CHS hospital accused it of filing fraudulent pneumonia claims for years. That triggered a U.S. Justice Department investigation of alleged "upcoding" -- submitting fabricated bills to Medicare, Medicaid and TRICARE, a federal employee insurance program. CHS hired an independent accounting firm to check the billing records of the 36 hospitals it owned between 1994 and 1997.

Three months before its second public stock offering in 2000, CHS reached a $31 million settlement with the justice department, which put CHS on a three-year corporate compliance agreement, a sort of financial-ethical to-do list.

CHS, which admitted no wrongdoing, released a self-congratulatory statement in March 2000.

"We were very pleased that through our company's initiative and effort, and with the government's cooperation, we were able to reach a final and satisfactory conclusion," CEO Wayne Smith said in the news release. He attributed the upcoding to a complicated reimbursement system, which he said "can sometimes be susceptible to misinterpretation."

Around this time, CHS started a company called Images, an Internet-based bariatric surgery referral program that purported to screen potential candidates, offer them psychological counseling and process their insurance claims. As part of the package, they'd receive airfare, ground transportation and lodging. Patients could go through Images for surgery at four rural hospitals in Texas and Louisiana. Images, now called COMPASS, offered surgeons' profiles and literary descriptions of the hospitals' locales.

Highland Medical Center, for example, is located "in the heart of the vast southern plains of West Texas and eastern New Mexico." Patients there can enjoy Lubbock's "warm days and cool nights."

One worker involved in Images/ COMPASS marketing told of being pressured to process as many patients as possible through those programs. Patient fees, the staffer said, were geared toward how many clients had already been processed each month. Those who paid through insurance reportedly would be charged as much as $15,000 more than those who paid cash for the surgery, which could cost up to $50,000 per patient.

Meanwhile, hospitals are urged to report "sentinel events," unexpected occurrences resulting in death or serious injury, to the Joint Commission on Accreditation of Healthcare Organizations. Despite the allegedly botched bariatric surgeries of July 29 and 30, Highland never reported them as sentinel events.

According to the employee, Images and COMPASS worked with strict sales quotas that put a priority on numbers.

Four sentinel events. Two days. One doctor. Zero reports.

CHS's numbers didn't seem to be adding up.


Among the surgeons to whom CHS referred patients via COMPASS were Srungaram, a general surgeon with a private practice on FM 1960, and David Syn. Syn, who is licensed in New York, lives in Lubbock. He applied to the Texas State Board of Medical Examiners in June, but was not licensed to practice medicine in Texas at the time he was on the Web site. Neither Syn nor Srungaram would answer questions for this story.

A brief profile of Srungaram can be found in public information from the Texas medical examiners' board, in civil district court lawsuits and on his Web site, www.obesenomore.com.

After graduating from medical school in India in 1975, Ramesh K. Srungaram spent a six-year general surgery residency at Cabrini Medical Center in Manhattan. He followed that with cardiovascular surgery fellowships in Brooklyn and Houston. In 1987, he won the Denton A. Cooley Cardiovascular Surgical Society Outstanding Fellow Award.

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